Air France-KLM suffers wider Q1 loss despite revenue growth

Air France-KLM suffers wider Q1 loss despite revenue growth

AIR FRANCE-KLM's first quarter operating loss widened to EUR143 million (US$156.97 million) from EUR99 million a year earlier, as the carrier's cargo traffic slumped in the first quarter, although, it claimed the business has experienced a recovery since the beginning of the year, on the back of higher load factors, according to chief financial officer Frederic Cagey.

Revenue slipped 4.7 per cent to EUR504 million ($549 million) from EUR529 million a year earlier, and traffic was down 1.3 per cent to 272,000 tonnes, against 276,000 tonnes last year, reported IHS Media.

The airline cut its freighter capacity by 14.8 per cent during the quarter as it continued to downsize its unprofitable all-cargo operation in a bid to return to operating break-even this year.

The Franco-Dutch carrier is benefitting from a strong rally in the European air cargo market, which experienced a demand spike of 18.2 per cent in March as the weak Euro strengthens exports, according to the International Air Transport Association(IATA).

Air France-KLM is, however, failing to keep up with its major European rivals, notably Lufthansa Cargo, which swung to a first-quarter profit of EUR33 million from a EUR19 million loss a year earlier on an 18.5 per cent increase in revenue to EUR569 million that helped its parent company to book its best first quarter earnings since 2008.

Air France-KLM's freighter fleet has shrunk to six aircraft - one leased - from 13 in 2013, and 26 when the French and Dutch airlines merged in 2005. Lufthansa Cargo, by contrast, operates 12 MD-11 freighters and five Boeing 777Fs.